In particular Mr Niznik has decreased his positions in both construction and general retailers. For example, where retail shares made up about 10-11% of the fund a year ago they are now at less than 4%. The manager says he worries that rising consumer debt levels and interest rates may slow the consumer side of the economy so he wanted to lower his aggregate exposure to those related sectors. Currently media is one of the fund’s biggest sectors as are aerospace and defence.
This fund is relatively new; it was launched in November 2002. Last year, as in 2003, Mr Niznik met his stated goal of beating his benchmark – the FTSE All-Share index minus the 100 biggest companies – each calendar year. However, performance of the underlying holdings varied markedly. Last year the fund had f
our holdings that fell by more than 40% and seven that rose by more than 40%.
Of the four that dropped so significantly Mr Niznik has kept two: Easyjet and Wolfson, a semiconductor design house, and sold two Minorplanet, the European market leader in vehicle telemetry, and Radstone Technology.
The top performers in 2004 included Topps Tiles which rose 79% and XP Power which climbed 60%. The fund also benefited from a number of acquisition bids for its holdings such as Ask Central and Linx Printing.
To reduce risk levels the maximum size of each holding is 3% of the overall fund. In practice the holdings are much smaller. Currently the fund has about 80 holdings and the ten largest make up about 21% of the fund.
It is also worth mentioning that the manager has all of his stockmarket investments in this fund.
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